Will Bal Thackeray’s death weaken Shiv Sena’s control in Brihanmumbai Municipal Corporation?

ET Bureau|

Nov 18, 2012, 12.10 PM IST

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Will Bal Thackeray’s death weaken Shiv Sena’s control in Brihanmumbai Municipal Corporation?

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Only a few miles from Mumbai’s financial district Nariman Point is the municipal corporation headquarters — the other centre of power. Whoever controls the corporation has influence over the builders — the cash-rich business community — known for its proximity to political powers.

The Shiv Sena-Bharatiya Janata Party coalition controls the Brihanmumbai Municipal Corporation. However, the presence of Maharashtra Navnirman Sena—led by the deceased Shiv Sena chief Bal Thackeray’s nephew Raj Thackeray — has been steadily growing at this power epicentre.

If there is a merger of the two parties, as many political pundits are forecasting, Raj will not only control the large section of the local masses but also have a say on the powerful community of realtors.

It was in the 1980s when the Shiv Sena’s dominance in the Brihanmumbai Municipal Corporation, the richest civic authority in the country, became clearly visible. And this also forced developers, then part of an unorganised business, to align themselves with the party for obvious reasons.

The BMC has a key role to play in the city’s realty skyline as it controls almost all the key permissions for development. Approvals for real estate projects in the hottest property market of the country take more time for developers than land acquisition, the big headache elsewhere in India, itself. It is only obvious then that the political party which dominates the corporation, read Shiv Sena, is also the most sought-after entity among developers.

One of the key initiatives of the Shiv Sena was the slum rehabilitation scheme. As the ruling party of the state, it expanded the scheme in 1995. The scheme continues to gain momentum as this remains a key route for land acquisition in land-starved Mumbai, be it for infrastructure, urban development or housing construction.

Today, we see even private equity players coming up with dedicated funds to support the projects of developers that involve slum rehabilitation and redevelopment projects.

The scheme was essentially a cross-subsidisation scheme under which developers could access land for development at market rates in exchange for providing housing for slum-dwellers. Given the restrictions on the market rate developers could seek, the earlier schemes failed to generate significant interest from builders.

Build Big

The expansion, as proposed by the party then, did manage to eliminate some of these restrictions, creating more opportunities for builders to pursue projects at market rates. The proposed scheme’s expansion, according to property developers, also had the benefit of timing as it coincided with the mid-1990s peak in Mumbai’s property prices.

During this period and later, some of the developers engaged in slum rehabilitation projects were also talked about as beneficiaries of the scheme. It was again in 1995 that the Shiv Sena-led government, which Bal Thackeray himself said was under his “remote control”, announced the construction of 55 flyovers in Mumbai.

The entire project was pegged at Rs 1,500–1,600 crore and was the largest urban infrastructure project undertaken in the city until then. This mammoth project led to allegations of corruption against the ruling party. However, according to property consultants, this provided a new lease of life to the city, which would have by now collapsed, given the current traffic pressure. These flyovers also led to a rise in property prices in key locations on the back of obvious benefits.

Plus, the Mumbai-Pune expressway, built by the state’s Road Development Corporation, was a result of a Thackeray wish. The corporation later built the Sea Link.

Power Shift?

Now, with the demise of Bal Thackeray, one of the most influential people of Mumbai, speculation has also gained momentum about which political leadership will gain control of the civic authority, Brihanmumbai Municipal Corporation, in the years to come. The new political scenario will guide realty developers on which way they need to sway to keep their businesses afloat.

Will Thackeray’s death weaken the party’s control in the 227-member corporation? Ask realty developers in private, and pat comes the answer that Shiv Sena at least for sometime will continue to rule, but the control may start shifting to the fledgling Maharashtra Navnirman Sena led by Raj Thackeray.

In recent times, Raj Thackeray has built a formidable reputation as an emerging leader for Mumbai and the Marathi manoos. Raj, from his success in the past corporation and assembly elections, has demonstrated his capabilities to influence this market. Considering the fading power of the Shiv Sena and the emerging strength of the MNS, it looks the real state wave in Mumbai will be directed by Raj Thackeray.

That said, it will be at least four years before any political change takes place at the BMC as the Shiv Sena has already gained a tight grip at the elections held earlier this year.